Noted for Your Morning Procrastination for November 13, 2014
Must- and Shall-Reads:
- : Medicaid patients have better access to primary care than you might think
- : The Thousand Fronts of Inequality
- : Leaked Geithner Files, as Quoted by Peter Spiegel
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: Time for the American right to declare peace on the US welfare state: “While the recovery’s glacial pace, both in terms of GDP and jobs, is unacceptable, the safety net’s performance is encouraging. The pain from the Great Recession, as bad it was, would have been far worse for middle- and low-income Americans if we were still in a sort of 1920s, Coolidgean world that many on the right these days seem to long for…. Now declaring peace isn’t the same thing as surrendering to the status quo…. But the welfare state needs thoughtful and thorough reform. And that doesn’t mean just slapping arbitrary spending caps on federal programs and block granting them back to the states…. Edward Glaeser would alter the EITC by making it a clear and transparent wage subsidy to all workers making less than $9 an hour…. There are lots of other center-right ideas out there: expanding the child tax credit, providing lump-sum bonus payments to unemployed workers who find a job, relocation vouchers to the long-term unemployed in high-unemployment areas, premium-support Medicare reform, expanding healthcare access through tax credits and well-funded high-risk pools…. The safety net isn’t going away, nor should it, but it will need to look a different tomorrow than it does today…” -
: An Unethical Bet in the Climate Casino: “The Republican victory in the midterm elections was a triumph for its strategy of sustained vilification of the president and obstruction of his policies. The result will have big implications for the future of the US. But it also has implications for the rest of humanity…. The US is also the world’s second-largest emitter of greenhouse gases and among the highest emitters per head. The most important consequence of this election may therefore be to bury what little hope remained of getting to grips with the risk of dangerous climate change…. Other countries will not–indeed cannot–compensate…. Nothing now suggests that humanity will move off the path towards ever greater emissions, with potentially huge and irreversible consequence. Why is that? If one ignores the charge that the science is a hoax, one sees two justifications and two reasons. One justification is that cost of action to mitigate emissions would be inordinate. It should be noted, however, that the costs indicated above would be less, possibly substantially less, than the costs to the high-income countries of the recent financial crises…. Yet, fascinatingly, the very same people who consider the costs of mitigation excessive wish to lighten financial regulation and so increase the risk of a repetition of the recent calamity. In addition, many of the opponents of such action are firm believers in the ability of economies to respond to market forces. So why do they not believe that markets would adjust to higher carbon prices? So what then are the real reasons? The first is ideology. If one accepts the existence of large global environmental externalities, one must also accept that there exists an important role for policy…. The second and more important reason is indifference to the fate of future generations…” -
: Best APEC summit ever: “This year’s APEC summit… stuff got done. Seriously, a LOT of stuff got done. For the United States, the centerpiece was three bilateral deals reached with China…. New targets for carbon emissions reductions by the United States and a first-ever commitment by China to stop its emissions from growing by 2030…. Mr. Obama and Mr. Xi also agreed to a military accord designed to avert clashes between Chinese and American planes and warships… as well as an understanding to cut tariffs for technology products. Those latter two agreements would be big deals in their own right…. The climate change agreement is even bigger, however, as it lays the groundwork for a global deal to be negotiated in Paris in 2015…” -
: A Non-Lawyer’s Guide To The Latest Supreme Court Case Attacking Obamacare: “The Supreme Court announced on Friday that it would hear a lawsuit, known as King v. Burwell, seeking to undermine the Affordable Care Act by cutting of subsidies intended to help millions of Americans pay for health insurance. Obamacare gives every state government a choice…. The government’s arguments are correct and the plaintiffs’ arguments are misleading…. Congress can define the phrase ‘Exchange established by the State’ to also include exchanges established by the federal government… and that is exactly what Congress did in the Affordable Care Act. Two provisions…. The first provides that ‘[a]n Exchange shall be a governmental agency or nonprofit entity that is established by a State.’ Read in isolation, this passage can be read in one of two ways. One way to read it is as a passage limiting who can set up exchanges. If an Exchange ‘shall be’ an ‘entity that is established by a State,’ that seems to mean that no other kind of ‘Exchange’ can exist. If the passage is read this way, federally run exchanges would be illegal, because they are not an ‘entity that is established by a State.’ The other… is that it is meant to define the term ‘Exchange.’ Under this second possible reading, the word ‘Exchange’ is defined so that any Exchange is deemed to be ‘established by a State,’ even if it was actually established by the federal government…. A third provision… provides that if a state elects not to set up its own exchange, ‘the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.’… This may seem as bizarre as using the word ‘dog’ when you really mean ‘cat,’ but Congress has the power to define words in counterintuitive ways, and courts are obligated to follow those definitions…. King v. Burwell, in other words, is a straightforward case of statutory interpretation, and the law is clearly on the government’s side…. The subtitle of the Affordable Care Act which contains the provision plaintiffs rely upon is titled ‘Affordable Coverage Choices for All Americans.’ It is not entitled, ‘Affordable Coverage Choices for Americans Who Live In States That Elect To Set Up Their Own Exchanges’…”
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: Macro and Other Market Musings: The Cure for Neo-Fisherism: History: “Stephen Williamson, John Cochrane, and Stephanie Schmitt-Grohe and Martin… argue that a central bank holding interest rates low for a long period will cause inflation to fall. The conventional view is that such actions should cause inflation to rise…. There are two reasons to be leery of Neo-Fisherism. First, it ignores Wicksell’s cumulative process. This idea says that if the central bank pegs the short-term nominal interest rate below the natural interest rate the price level will eventually explode and vice versa. The Fisher relation is an equilibrium condition and says nothing about this disequilibrium dynamic…. Second, Neo-Fisherism has been tested in the real world and failed…. Germany During and After World War I…. The United States and the Accord of 1951…. Canada Over the Past Twenty Years…. History is filled with many examples of monetary policy regimes that violate Neo-Fisherism. In fact, it is hard to come up with examples that unambiguously fit the Neo-Fisherite view…”
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: Understanding Spillovers: “Hélène Rey, Professor of Economics at the London Business School, and Research Fellow at the Center for Economic Policy Research (CEPR) and the National Bureau of Economic Research (NBER), will give the keynote Mundell-Fleming lecture on the controversial issue of global financial cycles and the extent of monetary policy independence of national central banks…. Just to give you a flavor of what to expect, here are some of the questions that we will be discussing: What is the impact of changes in US monetary policy on foreign bonds yields? Does it differ depending on the policy instrument used? Do conventional and unconventional policies have a different impact on the yield curve? How has unconventional monetary policy by the European Central Bank worked? What was the impact on Europe and the on the rest of the world? What are the relevant transmission channels; are these similar to the ones under US UMP? What is the impact of government spending on the exchange rate? Is it really associated to exchange rate depreciations, i.e. ‘beggar-thy-neighbor’ type of effects? Do sovereign debt defaults in one country trigger defaults in other countries? Do they change the cost of financing and incentives to default in other countries?
What are the conditions under which international spillovers effects are Pareto efficient? How does equilibrium with strategic policy setting at the global level compare against equilibrium with global policy cooperation? Is it optimal to restrict international capital flows amid financial markets incompleteness, i.e. prices sending signals that do not induce socially optimal outcomes? Have capital controls been effective? How is their potential effectiveness affected by leaks—i.e. the limited enforcement of these measures? Does deeper trade integration through international input linkages amplify cross-border spillovers? Can fiscal and capital market integration dampen the transmission of leveraging/deleveraging shocks within a monetary union –i.e. Europe? Did growth in countries with higher trade and financial integration fall more during the Great Depression?…”
Should Be Aware of:
- : Is wage stagnation killing the Democratic Party?
- : “Each one of us has a relationship with our own ignorance, a dishonest, complicated relationship, and that dishonesty keeps us sane, happy, and willing to get out of bed in the morning”)
- : I was wrong about the Second Amendment: Why my view of guns totally changed – Salon.com:
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: The Real Roots of Hedge Fund Manager Rage: “Paul Singer, the head of the $25 billion hedge fund Elliott Management, had an Edvard Munch moment in his most recent letter to his investors. ‘Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,’ he wrote. Some commenters think the economy is improving, but he wrote, ‘We do not think this optimism is warranted, and we think a lot of the data is cooked or misleading.’ This is only the latest howl about incipient inflation from the hedge fund manager crowd over the last several years. These inflation truthers have come in for consistent mockery, and deservedly so. They have aligned with conservative economists to attack the Federal Reserve and warn that its loose monetary policies are debasing the dollar and spurring sure-to-come, any-day-now runaway inflation. As The Washington Post’s Matt O’Brien noted, Mr. Singer made a classic, and in this case pretty hilarious, mistake of generalizing from his own experience. ‘Check out London, Manhattan, Aspen and East Hampton real estate prices, as well as high-end art prices, to see what the leading edge of hyperinflation could look like,’ Mr. Singer wrote…. Still, I come not to bury the wealthy investors, but to try to clarify what I think might be informing their perspective…. Hedge fund managers came of professional age during two gigantic bubbles, mass delusions that went on for years… the stock market bubble… a credit bubble…. These hedge fund managers–and the rest of the world of sentient markets observers–have spent the formative periods of their professional lives watching the madness of crowds, enabled by central banks…. After the stress tests, the government pronounced the banks O.K. (with a promise to backstop them if they couldn’t raise private capital). It was simply a collective exercise in looking the other way. Then, weirdly, it worked…. At the risk of sounding like a Singerite, doesn’t it sound just a bit–what’s the word?–fake? Just because you are paranoid, doesn’t mean the capital markets aren’t out to get you…” -
Thomas Piketty’s ‘Capital’ wins Business Book of the Year – FT.com: cg12348: “Don’t need to read the book – here is the premise. Business dreams are nothing more than greed. An you greedy business people should pay for those who are not cut out to take risk. You did not build your business – you owe everyone for your opportunity – you may have worked harder, taken more risk and even failed and picked yourself up at great personal risk and injury ( yes we often lose relationships and loved ones fall out along the way). However, none the less your are not entitled to what you make. Forget the fact that the real reason we have massive wealth today is we can now reach the global consumers – not just local – so the numbers are larger. None the less the fact is that is not fair – and fair is something life now guarentees – social engineers demand that you suspend the laws of nature and reward all things equally. 2 plus 2 = 5 so does 3 plus 3 = 5 everything is now levelled by social engineers. We need to be responsible for those who choose not to risk, want a 9 to 5 job and health benefits and vacation. The world is entitled to that – it is only right – so you must be taxed to make up for those who are too lazy to compete, simply don’t try or fail. In short the rich must map up the gap for the also ran’s. Everyone gets a ribbon. There are exceptions – if you are Google, BIDU, Apple or someone so cool or cute or a liberal who will tell people they should pay more taxes – you aren’t to be held to the same standard as everyone else.” Martin Wolf: “@cg12348, I think you succeeded in discrediting yourself comprehensively. You didn’t read the book. You do not in fact know what is in it. But you just ‘know’ what is in it. One can only hope that you do a little more work in your business ventures.”